DMA: Telemarketers May Be Overcalling

PALM BEACH, FL -- A white paper released yesterday by the Direct Marketing Association warned telemarketers that they stand to become victims of their own success -- and excess.

Titled "The Tragedy of the Commons," the paper compared the industry to the 17th-century sheepherders who overgrazed their village's common fields.

"Thus, for telemarketers, the tragedy of the commons may be upon us," the paper said. "We may be fast approaching a time when a multitude of individual direct marketers collectively call consumers too often or call consumers who don't want to be called at all."

The phenomenon could hurt response rates and has already aroused the wrath of the public, according to the paper. High-volume calling, along with "dead-air" problems that coincide with the use of predictive dialers, have drawn the attention of regulators and politicians who seek to further their political careers by supporting new telemarketing regulations, the paper said.

The paper was distributed at the DMA 2002 Teleservices Conference, being held through Friday here at The Breakers hotel.

The paper revealed a few details from an upcoming DMA study on the economic effect of direct and interactive marketing in the United States. According to that study, outbound telemarketing generated about $660 billion in sales, or 6 percent of the nation's gross domestic product, in 2001.

About 185 million Americans made purchases from outbound telemarketing calls in 2001, according to the study. Outbound telemarketing generated almost 4 percent of all U.S. sales in 2001.

Consumer outbound marketing generated $274.2 billion in sales in 2001 while business-to-business sales were $390 billion, according to the study. Consumer telemarketing is expected to grow to $402.8 billion in sales by 2006.

Though the industry's success is likely to continue in the short and medium term, telemarketing faces long-term threats as younger consumers, who prefer shopping on the Internet to the telephone, become the nation's primary consumers, the paper said.

Given this trend, "the telephone's position as the preferred electronic transaction medium is unlikely to endure in the longer term," the paper said.